If you map these groups to Splunk Roles, then yes.
For the index part of the restriction, I would look on the roles page under "Indexes searched by default" and "Indexes" (the difference is subtle but very important). Choose which of the two you'd like to use. Possibly the answer is both. And set for both Role A and B, that they are one way or another restricted to index=business-events.
Then, for the merchantid search restriction, you can just use the "Restrict search terms" field in the role page.
eg for role A, you can set merchantid=1 under "Restrict search terms", and for role B set merchantid=2
http://docs.splunk.com/Documentation/Splunk/5.0.3/Security/Addandeditroles
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